High Street Giant Acquires Struggling Fintech
Britain's largest high street lender, Lloyds Banking Group, has formally signed a controversial £120 million deal to acquire the digital wallet provider Curve. This move comes despite significant opposition from shareholders regarding both the sale price and the proposed distribution of proceeds.
Sky News learned that Curve notified its investors this week that it had executed a share sale and purchase agreement with Lloyds. An official announcement is anticipated as early as next week, bringing a contentious chapter for the fintech to a close.
Investor Fury and Disputed Governance
The acquisition has sparked considerable recriminations among Curve's early backers. In a circular to shareholders, the company's board acknowledged the disappointment, stating: "We recognise that the value of this transaction falls short of the ambitions we all held for Curve." However, they defended the decision, asserting it was the best available path for creditors and shareholders.
The most vocal opposition has come from IDC Ventures, Curve's largest external shareholder with a 12% stake. The firm released a statement expressing it remains "deeply concerned about the conduct of Curve's management and board." IDC has appointed law firm Quinn Emanuel to advise on the situation and has reserved all legal rights, stating it does not intend to support the proposed sale.
Efforts to oust Curve's chairman, Lord Fink, and its founder and CEO, Shachar Bialick, were voted down at a shareholder meeting early last month, further highlighting the internal strife.
Strategic Rationale and Financial Pressures
For Lloyds, the acquisition is a strategic play to gain an edge in the competitive race to develop smarter online payments systems. This is particularly relevant amid growing pressure on tech giants like Apple to open their payment services to rivals.
Curve's founder, Shachar Bialick, had previously conceded that the sale price was disappointing. He had also warned that the company was likely to run out of money later this year if a sale to Lloyds was not agreed upon. Since its establishment, Curve has raised over £250 million in funding, making the £120 million sale price a significant markdown for investors.
The deal represents a pivotal moment for the UK's fintech landscape, demonstrating the challenges even ambitious startups face in achieving profitability and the growing appetite of traditional banks to acquire digital innovation.
